STUDENT NOTES 3

CH. 6 NIGERIA

POLITICAL ECONOMY Origins of Economic DeclineOrigins of Economic Decline

• Nigerian economy was centered on agricultural production for domestic consumption as well as for export.

– Nigeria self-sufficient in food production at independence

• Late 1960s emphasis shifted to nonfood export crops through large-scale enterprises

– Small farms received little government support.– Food production declined, food imports increased to meet population needs.

• Three factors undermined Nigerian agricultural: Biafran War (1967–1970) Severe drought and subsequent famine Development of petroleum industry

POLITICAL ECONOMY

•1970s oil boom allowed Nigeria to increase education, defense, infrastructure expenditures.

– Imports of capital and consumer goods increased seven-fold.– Budget deficit by 1978 caused borrowing and increased debt.

•Increased oil wealth increased corruption.– Nigeria forced to import refined petroleum. – 2002 internet scams had become one of Nigeria’s top five

industries, earning more than $100 million annually.

•Oil boom: double edged sword – Generated large amounts of income– Source of external dependence

POLITICAL ECONOMY• 1970’s: oil sucked up much of the

domestic capital that might have been used to agriculture or industry

• Rentier state: a country that obtains lucrative income by exporting a raw material or leasing out a natural resource to foreign countries– ***Dependent on that revenue!– Oil is the property of the state– ~2.5 million barrels/day– 95% of export earnings– 80% of federal revenue

POLITICAL ECONOMY• CONSEQUENCES:

– lack of diversification of the local economy – price fluctuations caused by dependence on world

market – income inequality exacerbated where disparity is

already extreme – no incentive to industrialize/modernize economy – increased opportunity for corrupt usage of income

from rents – lack of accountability to citizens

POLITICAL ECONOMY• Nigerian wealth was perceived by elite as source of

strength.

– When the oil market fell, oil dependence was seen as a source of weakness.

• Nigeria was forced to seek support from international financial institutions.

• Nigeria remains dependent on Western technology and expertise for oil exploration and extraction.

• Formation of African Union, based on European-style integration

Governments commit to good governance and economic reforms in exchange for access to Western markets and financial assistance.

• Nigeria in the Regional Political Economy– Economic Community of West Africa States

(ECOWAS)-attempts to unite currency and trade efforts

– Mission: promote economic integration across the region; trade block

Political Economy and Development

Political Economy and Development

• Oil– Oil wealth during the 1970s gave

Nigeria international leverage

– OPEC member

– Conflicts in Middle East have made Nigeria more important as a trade partner for other countries since 1970s

– Lack of economic diversification hurts Nigeria when oil prices drop

– DEBT – as a result of drop in oil prices and lack of revenue surplus

• Structural Adjustment– 1980s, Nigeria seeks assistance from

international organizations to deal with debt crisis

– World Bank & IMF involvement• Restructure & diversification of

Nigerian economy• Privatize parastatals• Cut government spending

– “Shock Treatment” not very successful

• Parastatals still under government control

• Debt repayment had to be restructured

Nigeria’s Goodluck Jonathan, profile of a president

• Describe how President Jonathan “fall into the presidency.”

• Describe how President Jonathan’s run in 2010 broke with PDP tradition.

• Explain why President Jonathan’s rise to power is described as ‘meteoric.”

• Describe how each of the following have weakened President Jonathan’s political position/legitimacy:– Allegations of corruption:– Insurgency of Boko Haram:– President Obasanjo’s critique’s:

Nigeria schools walk line between Islamic and Western traditions

• Describe the difference in access in education in northern versus southern Nigeria.

• Describe how access to education for even a small amount of children in northern Nigeria can have a larger impact on entire villages.

• Describe the possible long-term outcomes to modernizing Koranic schools.

• Explain how northern Nigeria’s colonial past threatens the desire to modernize education.

Nigeria’s “brown envelope’ journalism

• Explain how ‘brown envelopes’ undermine freedom of the press.

• Explain how the meaning behind the following statement threatens Nigeria’s frail democratic status: “The Nigerian media has become a thriving arena for all sorts of sponsored falsehoods.”

Nigeria’s fashionistas upset by falling oil prices

• Explain how Nigeria’s status as a rentier state has affected prices on basic consumer products.

• Describe the suggested solutions for Nigeria’s ‘monoculture economy.’

Nigeria’s suddenly supersized economy is indeed a wonder; but so

are its still-huge problems• Describe the conditions that have led to Nigeria’s

present/new status as the ‘colossus of the continent.’

• Explain how Nigeria’s GDP and GDP per head account for its classification as both growing economically while still lacking developmentally.

• Describe the conditions that can lead to Nigeria’s economic progress slowing.

Nigerian elections: Goodluck Jonathan vs. Muhammadu Buhari

again

• Explain how the presence of Boko Haram threatens the 2015 Nigerian presidential election.

• Explain why the Nigerian media has predicted a possible victory for Buhari after 3 consecutive losses.

• Explain how the presence of Boko Haram threatens Buhari’s election chances.

• Describe the methods used by the National Electoral Commission to ensure a clean election.